Larry Cragun over at the Real Estate Undressed Blog has a terrific anecdote about the big problem with not just sub prime loans, but many sub prime lenders. Larry’s basic point is that lenders ignored the histories and needs of borrowers and just hucked them some crappy sub prime ARM. In one particular instance the borrower was an excellent candidate for an FHA loan – practically a poster child. Experiences like Larry’s are one more reason why FHA needs to be back in the forefront for borrowers and lenders.

Plus, kudos to Larry for mentioning the pros with the cons. As mentioned the other day here, Larry also recognizes the problems with all the FHA red tape.

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